DoorDash’s $17 billion acquisition of Instacart comes with clear terms for shareholders and a closing timeline that stretches well into the future.
Under the agreement announced Thursday, October 29, DoorDash will pay $65 per Instacart share, a premium of about 26% over the stock’s closing price on October 22, before reports of deal talks first emerged.
Instacart, formally known as Maplebear, saw it shares flat at $58.50 in premarket trading following the announcement. They hit a record high of $62 on Monday, October 26.
The consideration will be at least 75% cash, with Instacart shareholders able to elect cash, DoorDash stock or a combination of the two, the companies said.
For DoorDash investors, the reception was warmer. DoorDash shares jumped nearly 7% after the company also reported better-than-expected quarterly revenue, though the stock has declined about 25% so far this year through its last close.
The transaction is expected to close at the end of 2027 or in the first half of 2028, a relatively long runway that leaves room for regulatory review.
The deal could face scrutiny over its impact on competition.
“The ongoing merger is part of a troubling trend of corporate consolidation,” said New York City’s Department of Consumer and Worker Protection on Wednesday. DoorDash stated that local grocery stores would be able to use any delivery service as desired.
DoorDash stated that the Instacart name and app will be retained and orders will be fulfilled as always by Instacart shoppers. Instacart customers will receive access to 50,000 more stores that are on the DoorDash network.
The five-year-old Instacart has a market value of $14 billion while DoorDash has a market value of $73 billion. This helps understand the premium; while the Instacart share of U.S. deliveries dropped from 26% to 18% over the last five years, that of DoorDash increased from 44% to 59%.
Shareholders will need to determine if the premium will hold up until closing and how regulators will treat the merged company.
